Concept:Inflation reduces the purchasing power of money, which directly harms income earners.
Explanation:Real income means the actual purchasing power of money after adjusting for inflation.
During inflation, the general price level rises, so the same amount of money buys fewer goods and services.
Therefore, if inflation rises faster than money income, real income falls.
A fall in real income is an adverse effect on the economy.
Increase in money supply and increased employment are not adverse effects here.
Appreciation in the value of money is the opposite of inflation, not an effect of it.
Answer:B. a fall in real income